Hungary PMI Shows Expansion as Cabinet Sees 2013 Growth

Feb. 1 (Bloomberg) -- Hungarian manufacturing expanded the
most in 10 months in January, reinforcing the government’s
forecast that the economy will return to growth in 2013 after a
recession last year.

The purchasing managers’ index, as reported by 100
manufacturing companies, jumped to 55.9 points from a revised
49.1 points in December, MLBKT, the company which compiles the
data, said in a report today. That’s the highest since 57.7
points in March 2012.

Hungary is battling its second recession in four years as
government policies damage investor confidence and trade and
banking links with the slumping euro area drag down growth. The
economy shrank for a third consecutive quarter in the July-September period.

The economy may get a bigger-than-forecast boost from
agriculture and car production this year, which may lift gross
domestic product by more than the 0.7 percent to 0.9 percent
growth rate the Cabinet currently estimates, government
spokesman Andras Giro-Szasz told state-run MR1 radio on Jan. 25.

The forint strengthened 0.4 percent to 291.68 by 9:07 a.m.
in Budapest, advancing for a fourth day. The benchmark BUX stock
index was little changed at 19,370.53.

The economy will expand 0.3 percent this year and 1.3
percent in 2014 after contracting 1.2 percent last year,
according to the European Commission.

Agriculture, Cars

Both agriculture and car output will be helped by a low
base in 2012, Giro-Szasz said, citing extreme weather conditions
that destroyed crops last year as well as plans by carmakers to
boost production this year from 2012 levels.

Daimler AG’s Mercedes factory started production of its CLA
model, a four-door coupe, exclusively in Hungary last month,
Chief Executive Officer Dieter Zetsche said in the central
Hungarian city of Kecskemet on Jan. 25.

The PMI index is a weighted average of five indexes: new
orders, production volume, employment, transportation time, and
purchased inventory. A reading below 50 indicates a contraction
in output.